Federico Droller
My primary interests are in economic growth and development, macroeconomics, cliometrics and political economy
Working Papers:
Mortality Inequality, before and after Covid-19: A Regional Study on Chile
Financial Literacy, Informal Debt, and Psychological Well-Being among Small Business Entrepreneurs
(joint with F. Borrescio-Higa and P. Valenzuela). submitted
This study investigates the relationship between financial literacy, informal debt, and psychological well-being in a large sample of small business entrepreneurs. The paper finds a strong latent demand for financial education, which is particularly high among female, younger, and less educated entrepreneurs. Entrepreneurs who have not adopted good financial management practices believe that better levels of financial literacy would help them improve their business’s performance. The study also shows that entrepreneurs with a higher need for financial education tend to rely more on moneylender debt. By contrast, assistance to entrepreneurs who are looking for new sources of capital tend to mitigate their dependency on moneylender debt. Finally, the study shows entrepreneurs who incur in moneylender debt are more likely to have worse levels of psychological well-being.
Migration, Occupational Choice and the Legacy of Animal Husbandry in the Pampas
The Age of Mass Migration brought thousand of migrants every year to Argentina. Coming mostly from south--European countries, migrants settled and joined the labor market across counties in the fertile plains of the Pampas. In this article, we show two pieces of evidence, first we show that prior to the arrival of immigrants, land was already used for productive activities, ranching or agriculture being the main uses of land. Persistence in the use of land created differential labor opportunities in each county, and thus constrained the arrival and settlement of immigrants. In turn, immigrants' sorted themselves into different counties, taking advantage of their human capital, knowledge or skills and the labor opportunities. We argue the initial use of land and the allocation of human capital across the fertile plains had a profound effect over the short run occupational choice at the local level.
A Curse of the Cow? Ranching and Land Concentration in Buenos Aires During the First Globalization
(joint with L. LLach and P. Schiaffino).
Distribution of agricultural land was more concentrated in Argentina than in other frontier economies during the First Globalization. Inequality in land distribution had consequences in the 20th century, as agriculture was targeted by anti-oligarchic governments. Why was land distribution comparatively unequal? Some explanations have emphasized purely political factors, though this begs the question of political inequality. We propose and test another hypothesis: in contrast to the North American farmer economies, cattle raising in the Pampas predated cereal agriculture. The scramble for land in the form of large estates necessary for extensive husbandry was complementary to the appropriation of cattle. Using both new data on the size of estates and Census data on the size of productive establishments, we show that, all else equal, land property was larger in counties in the province of Buenos Aires where ranching predated agriculture.
Nutrition and Educational Outcomes: Evidence from a large public program in Chile
(joint with F. Borrescio-Higa and G. Bozzoli)
In this paper, we analyze the effects of a large complementary nutrition program for pregnant mothers and their children in Chile. Our dataset is based on archival and microdata samples for the Census of 1960, 1970, 1982, and 1992. The treatment is a 3-year moving-average around the year of birth of the milk distribution level per live births at the province. We estimate the impact of the milk program on the years of schooling, with an identification strategy that is based on maternal fixed effects for a sample of siblings, and show that analyzing the full census sample with a rich set of controls for the mother and the household renders similar results. We find a positive and meaningful contribution of the milk program on schooling. The most significant effects appear in the 1970 and 1982 censuses, which capture children who were born in the 60’s and 70’s when the expansion of the program was strongest. For the 1982 census, the magnitude of the result implies that an additional year of the milk program resulted in an average 0.2 additional years of education for each cohort under treatment.
Publications:
International Journal of Public Health, 25, August 2022.
(joint with F. Borrescio-Higa and P. Valenzuela). Accepted.
The paper uses a unique survey of adults to examine the impact of financial distress caused by the COVID-19 pandemic on mental well-being. Results show unemployment and income loss are highly predictive of experiencing a range of financial problems, such as a lack of savings, as well as difficulties paying bills, consumer debt, and mortgage loans. In turn, financial distress leads to a higher prevalence of poor well-being and mental health deterioration, including feelings of depression, worry, and anxiety. Expansion of mental health assistance services are needed, as new diagnosis of mental health conditions has increased, but treatment has not, pointing to a barrier in the access to some mental health care services during the pandemic. Policies designed with the objective of improving financial education are necessary to increase precautionary savings and financial resilience, and alleviate the psychological burden of debt in the future.
(joint with Martin Fiszbein)
We investigate how historical patterns of primary production influenced development across local economies in Argentina. Our identification strategy exploits exogenous variation in the composition of primary production induced by climatic features. We find that locations specializing in ranching had weaker linkages with other activities, higher concentration in land ownership, lower population density, and less immigration than cereal-producing areas. Over time, ranching localities continued to exhibit lower population density and they experienced relatively sluggish industrialization. Ultimately, ranching specialization had large negative effects on long-run levels of income per capita and human capital. Our findings show that early patterns of production can have a crucial influence on development patterns, providing suggestive support to the staple theory of economic growth.
The Economic Journal, Vol. 128, Issue 614, 2018
Abstract: This paper analyses the impact of population composition on long run economic development, by studying European migration to Argentina during the Age of Mass Migration (1850-1914). I use an instrumental variables (IV) approach that assigns immigrants to counties by interacting two sources of variation: the availability of land for settlement and the arrival of Europeans over time. Counties with historically higher shares of European population in 1914 have higher per-capita GDP 80 years later. I show that this long run effect is linked to the higher level of human capital that immigrants brought to Argentina. I show that Europeans raised literacy rates in the receiving counties, and that high-skilled Europeans played an important role in the onset of industrialization, owned most of the industrial establishments, and provided the majority of the industrial labour force.
Cliometrica, 2020
(joint with M. Llorca, J. Navarreteo, R. Araya, M. Allende & J. Rivas)
This article provides the first series of Chilean adult male height for the whole of the twentieth century. The height of adult males increased by about 5.5 cm during the twentieth century, primarily during the second half of this period. This is the greatest improvement in biological welfare in Chilean history; Chilean males have never been as tall as they are today. Using a sample of around 36.371 individuals we document the evolution of the average height of Chilean soldiers (male) born from the 1900s to the 1990s. This sample can be safely taken as a good proxy of the average height of Chilean male population for the period under study. We provide an explanation of both the main determinants of physical stature and the rapid increase in height in Chile over this period.
Economics and Human Biology, Vol. 33, 2018
(joint with F. Borrescio-Higa and G. Bozzoli)
In this paper, we analyze the relationship between adult height and early-life disease environment, proxied by the infant mortality rate (IMR) in the first year of life, using cohort-region level data for Chile for 1960-1989. IMRs show a remarkable reduction of 100 points per thousand over this thirty year period, declining from 119.4 to 21.0 per thousand. We also document a 0.96 cm increase in height per decade. We find that the drop in IMRs observed among our cohorts explains almost all of the long-term trend in rising adult heights, and that GDP per capita does not appear to have any predictive power in this context. Results are robust in a variety of specifications, which include area and cohort dummies, an adjustment for internal migration, and urbanization rates. Our results point to the long-term effect of a public health policy.
Economics and Human Biology, Vol. 29, 2018
(joint with M. Llorca, J. Navarrete and R. Araya)
This article provides the first height estimates for the adult population for any period of Chilean history. Based on military records, it gives an analysis of the average heights of male soldiers in the last eight decades of the colonial period, c.1730s-1800s. The average height of Chilean men was around 167 centimetres, making them on average taller than men from Mexico, Italy, Portugal, Spain and Venezuela, but of a similar height to men from Sweden. However, Chilean men were clearly shorter than men in neighbouring Argentina, the USA and the UK. Chilean height remained stable during the 1740s-1770s, but it declined by some 2-3 centimetres between the 1780s and the 1800s, in line with a fall in real wages due to increasing food prices and population growth.
Journal of Iberian and Latin American Economic History, 2019
(joint with M. Llorca, J. Navarrete and R. Araya)
This article provides the first series of adult male height for 19th-century Chile. Our aim was not only to assess the trends indicated by height during this period, but also the relationship between stature and both GDP per capita and exports. Having analysed our data, our primary conclusion is that there was a reduction in height for cohorts born in the 1850s and 1860s with respect to cohorts born between 1820 and 1840. Height stagnated thereafter, with small to no improvement towards the end of the 19th century, in line with other Latin American countries for which there is comparable evidence. The increase in per capita GDP and exports during the second half of the century did not result in better biological welfare, as was the case in other Latin American countries during similar export booms.
Journal of Iberian and Latin American Economic History, Volume 34, December 2016
(joint with C. Cussen and M. Llorca)
This paper provides the first survey of slave prices for Santiago de Chile, c.1773-1822. It also establishes the main determinants of slave prices during this period. We gathered and analyzed over 3,800 sale operations. Our series confirm the usual inverted U-shape when prices are plotted against age, and that age was a very important determinant of slave prices. We also found that: female slaves were systematically priced over male slaves, quite contrary to what happened in most other markets; the prime age of Santiago slaves was 16-34, a younger range than for most other places; male slave prices moved in the same direction as real wages of unskilled workers; and the impact of free womb laws on market prices in 1811 was dramatic.
Work in Progress:
Beliefs in Market Economy and Macroeconomic Crises while Young
Abstract: This paper analyzes how past economic history shapes individual beliefs in market economies. Evidence from a cross section of countries in Latin America indicates that economic crises suffered during early adulthood negatively affect individual beliefs. In particular, crises at an age of 22-25 years old reduce the probability of believing in a market economy as a source of economic growth, while crises at other ages are not relevant for the formation of beliefs.
Population Composition and Human Capital Creation: the Highschool Movement in the U.S.
Abstract: This paper studies how diversity affects the creation of human capital. I show how the composition of the population affected enrollment rates across counties in the U.S. at the beginning of the twentieth century. The mass European migration to the U.S. in this period of time provides for a change in the composition of the population. First I show with individual-level data that foreign individuals attend less school. Second, I analyze county-level data and measure diversity with a fractionalization index. I find that communities were fractionalization was higher experienced lower enrollment rates in early years, and this negative effect diminishes over time.
Teaching:
- Principles of Macroeconomics
- Macroeconomics
- Economic Growth